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C-Founder at Diginomica, Vice President EuroCloud UK, CEO of strategic consulting group Procullux Ventures.

One response to “When Will Facebook’s Bubble Burst?”

  1. JoeTierney

    Can’t be too much longer. There’s no firm in the world with more tricks available to drive up valuation than Goldman. A lot of people think of Goldman as putting money into Facebook but they’re not buying, they’re selling and selling hard. Facebook continues to push against user privacy and growing pressure on the firm to increase revenues (whatever they might be) will continue to cause conflict between those who bring value to the service, the user community, and those who pay the bills.

    Facebook talks like it actually owns the “social graph” but that’s not the reality. Facebook has been entrusted with the information and if the community walks, it’s game over. MySpace speculation hit $30B but the community didn’t respond well to the over commercialization of the site. Facebook offered a clean space – that space is quickly filling up.

    Facebook is working hard to change the nature of the information we share on the site from personal, which we’re less inclined to share, to public, which we’re comfortable sharing, with features like the Like button (on this site for example). This helps with their privacy issues and therefore revenue issues. It also makes the service more sticky in the eyes of those generating content.

    Facebook’s commercial success is dependent on protecting a closed system and literally selling out users. No doubt they’ll make plenty of money but you can’t own “social”. You can exploit it but you never own it. Of course exploitation is Goldman’s specialty so it’ll be very interesting to see how everything goes down regardless.